The introduction of the Internet has brought about a massive increase in the number of property investors in the UK and also around the world. The ability to access up-to-date online information means that you can effectively research any property market across the UK and indeed across the world. There are also thousands of different articles giving you news, views and opinions, many of which contradict each other but certainly give you a breadth of knowledge which was not available before the Internet arrived.
There also seem to be as many people contemplating an investment in the property market as actually investing. So, what is stopping you from entering the property market?
Financial position
Whether you’re looking to buy a house to live in or for investment purposes you need to have the financial backing behind you. Mortgage regulations across the UK have been tightened with a greater emphasis on higher deposits and more background checks on applicants. However, do not automatically assume that you will be refused a mortgage because banks still need to lend money and property markets still need funding.
Spoilt for choice
If you look at the UK property market in the cold light of day there are many different niches filtered by area and type of property. Sometimes it can be difficult to know where to start but your starting point must be the type of property you feel more comfortable investing in and the area you believe has most potential. In many ways it is a case of starting at the end and working your way backwards to arrive at potential purchase options.
It can be very easy to get caught up in the moment, to follow the sheep investing in the latest trend but especially with your first property investment you need to be comfortable with the type of property, the area and more importantly the price.
Timing
The only thing we know for definite is property prices today, we have no idea what may happen tomorrow, we have no idea what may happen next year but in general we can look forward to the longer term with a greater degree of confidence. In a perfect world you would buy your property at the bottom of the market, hold it until markets recover and then sell at the top. However, nothing is ever as straightforward as this and if you are seriously contemplating a property purchase then by all means take into account potential short-term factors but never lose sight of the longer term.
If we all had a pound for every investor who “wished they had invested last year” we would be millionaires without any risk!
Is it viable to trade property assets?
Many people make relatively high returns by trading property assets, effectively buying them when out-of-favour and selling them when back in favour. However, history shows us that the more successful property investors are those that tend to hold the vast majority of their property assets for many years while perhaps trading a small percentage.
If we look at the UK for instance, there are some very positive long-term indicators including a growing population, a relatively strong employment market and what seems to be a constant stalling by governments who have promised to introduce more new builds. Even if, as many governments have promised, the number of newbuilds was to increase significantly we are still well behind the curve and funding issues together with skills shortages will ensure we remain this way for some time to come.